Range Fuels to help meet RFS2 in 2010

By Anna Austin

Posted March 4, 2010, at 3:54 P.M.

In November 2007, Range Fuels announced intentions to build the world's first commercially-viable cellulosic ethanol plant at Soperton, Ga. Since then, there have been some setbacks and changes made to the master plan. Regardless, CEO David Aldous still sees a bright future for the Broomfield, Colo.-based company, and said Range Fuels continues to embrace the project with full commitment and passion.

Aldous has been the CEO of Range since November 2008, replacing now director of the board Mitch Mandich. His previous positions include executive vice president of strategy and portfolio for Royal Dutch Shell in London, president of Shell Canada Products and president and CEO of global catalyst company CRI/Criterion.

With a recently-secured $80 million USDA loan guarantee, Range will complete the mechanics of its first project phase within the next week and begin initiating phase two, according to Aldous. The loan guarantee marks the second time the company has scored government-backed funding; the project began following a $76 million U.S. DOE grant in early 2007.

The first project phase includes one gasifier unit and will handle 125 dry tons of wood per day, which Range is purchasing from local suppliers. "As we continue to scale up, we'll use the same size equipment but add multiple (gasifier) units," Aldous said. "Phase one will be mechanically complete next week, and then we'll begin commissioning loop checks and get utilities going." He expects Range to actually be feeding wood into the gasifier in the second quarter of this year, producing fuel shortly thereafter.

A significant part of phase one, to be operated in a quasi-commercial quasi-demonstration capacity, is to test and learn from the equipment and to experiment with feedstocks other than wood, specifically miscanthus and other energy crops, according to Aldous.

Initially, the fuel produced will be methanol. "There are a couple of reasons for that," Aldous said. "The catalyst is cheap, so if the syngas has any kinds of hiccups, we won't destroy a bunch of expensive catalysts. We have a couple reactors, and we'll put ethanol catalysts in them and begin producing ethanol in the third quarter of this year."

Range Fuels' methanol will qualify under the renewable fuel standard 2 (RFS2), as the company plans to put it into biodiesel. RFS2 lowered the cellulosic biofuel requirement in 2010 to 6.5 million gallons, from RFS1's 100 million gallons, due to many changes or delays of cellulosic biofuel projects caused by technological, contractual, financial or other problems. Aldous said he isn't sure whether Range will produce the 4 million gallons of cellulosic biofuel the U.S. EPA anticipates in the rule, but might even produce more, pending ongoing tests. "It's a first-of-a-kind plant, first-year startup, and my experience with these things has been that they don't always run as you hope the first few months, so I think this year will be a year of learning and insight for us."

Range is also currently engaged in engineering/design for a 50 MMgy ethanol project that will generate power for the grid, and plans to apply for funding late this year or early next year.

On recent criticism for the large amount of money and time spent on the project as well as changes to the original announcement, Aldous said it's very easy to be a skeptic or cynic. "But it's difficult to drive change, innovation and a new way of using energy," he said. "To our critics, I would ask ‘what are you doing to reduce our dependence on foreign oil, reduce greenhouse gases or create a new domestic energy industry?'"